Banks like JP Morgan are already planning how they will relocate out of Britain if the UK loses its financial passport, the industry’s chief executive has said.

Anthony Browne, chief executive of the British Bankers’ Association, said yesterday in an article for The Observer: “Most international banks now have project teams working out which operations they need to move to ensure they can continue serving customers, the date by which this must happen and how best to do it.

“Their hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.”

In an article for the Observer, Mr Browne points out that Brexit for banks is not about additional tariffs on trade but about whether banks have the legal right to provide services.

Mr Browne says banks have to ‘hope for the best but plan for the worst.’

He says the problem is the rhetoric on both sides of the channel – with Britain insisting on controlling freedom of movement and countries like France saying we must ‘pay the price’ for a so-called hard Brexit.

He says bankers across Europe agree that it is better for all countries if the integrated financial market survives, but adds: “But politics trumps economics and it will be the politicians who decide.”

He says the banks run the risk of passporting rights disappearing overnight, with nothing to replace them, unless governments on all sides agree to transition arrangements that make it clear what London’s place will be.